By Senator Herb Kohl

During these hard economic times, it is important for consumers to understand their options and know where to find answers to financial questions. A lot of the banking jargon being used on the news can be confusing, with terms such as Term Asset-Backed Loan Facility, credit default swaps and mortgage backed securities. With all of the action surrounding the banking industry, keeping track of what it all means to you can be difficult.

First, one of the most important things to check is if your bank or credit union has deposit insurance. Congress has temporarily increased the amount that is insured by the government, up to $250,000. If you are unsure if your financial institution has Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA) protection or to how much of your money is protected, contact your bank or credit union.

Second, if you are having difficulty making monthly mortgage payments, talk to your bank or lender. Many banks are willing to work with homeowners so they can find a sustainable solution. If you are having difficulty getting in touch with someone or do not feel comfortable speaking to your lender, there are other resources available. To speak with a certified counselor to help you work with your lender, call the Homeownership Preservation Foundation hotline at 1-888-995-HOPE. To find a housing counselor near you in Wisconsin, call toll free 800-569-4287.

Third, assess your current financial situation and make a budget to help prioritize important household expenses. Taking a closer look at household spending may reveal areas where you can cut back and save money. Set aside whatever money you can to pay down high-interest debt, such as credit card bills, which can be a terrible drain on your finances. If you are having trouble managing your bills, you can speak with a certified credit counselor by calling the National Foundation for Credit Counseling at 1-800-388-2227.

Finally, plan for the future. It is never too early to start saving for retirement, and money you save earlier will have the most time to gain value in investments you make. Some companies match the contributions employees make in their retirement accounts, and when considering your household budget you should make every effort to take full advantage of this benefit. Ask your employer any questions you have about your company’s retirement plan.

Financial issues can be extremely confusing, and as a member of the Senate Banking Committee we will continue to advocate reforming our financial system to make it work better for all Americans.

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